The investor safeguards provided by the Securities Investor Protection Corporation (SIPC) have become a factor in how Main Street Americans think about investing. Every year, SIPC member firms pay an assessment to the Corporation and, in return, SIPC works to return to investors missing cash or securities in the custody of failing or insolvent SIPC-member brokerage firms. It also maintains a reserve to meet remaining customer claims of up to $500,000, including a maximum $250,000 in cash.
The brokerage industrys participation in SIPC represents a shared commitment to shielding investors from many of the negative impacts of a firms bankruptcy. SIPC not only benefits investors, but financial advisors by instilling confidence in brokerage firms, which have long enabled U.S. capital markets to fund companies while helping investors make progress on their financial goals.
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